Table of Contents

INTRODUCTION...........................................................................................................................3

Management Integration..............................................................................................................4

Cost Benefits................................................................................................................................4

Strategic Planning........................................................................................................................4

Organizational Performance.........................................................................................................4

Financial Controls........................................................................................................................4

Finding the perfect software........................................................................................................5

Commitment from managers.......................................................................................................5

System training............................................................................................................................5

Sufficient testing functional.........................................................................................................5

Lack of budgeting........................................................................................................................5

Modern, connected ERP in the cloud...........................................................................................6

Closing the loop between production and engineering................................................................6

Mobile enablement wherever possible.........................................................................................6

Configure, price, quote (CPQ) functionality................................................................................7

Asset management and maintenance...........................................................................................7

CONCLUSION................................................................................................................................7

REFERENCE..................................................................................................................................8

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INTRODUCTION
Procure to pay is the process of requisitioning, purchasing, receiving, paying for and accounting
for goods and services. It gets its name from the ordered sequence of procurement and financial
processes, starting with the first steps of procuring a good or service to the final steps involved in
paying for it.

ERP software is considered to be a type of enterprise application, that is software designed to

integrate core business processes and to be used by larger businesses and often requires
dedicated teams to customize and analyze the data and to handle upgrades and deployment. In
contrast, Small business ERP applications are lightweight business management software
solutions, often customized for a specific business industry or vertical.

Toyota Kenya implements ERP systems to replace legacy software or to incorporate ERP
applications because no system currently exists (Jo, 1998). In fact, a 2016 study by Panorama
Consulting Solutions, LLC., indicates that organizations implement ERP for the following
reasons:

 To replace out-of-date ERP software (49%)

 To replace homegrown systems (16%)

 To replace accounting software (15%)

 To replace other non-ERP systems / had no system (20%).

Toyota Kenya relies on ERP systems to communicate data between department such as shop
floor planning, purchasing and accounting. ERP system are the outgrown of material requirement
planning (MRP). An MRP system calculates the necessary inventory and components
requirement for production and it keeps production up to date. MRP systems, however cannot
communicate with other systems such as legacy purchasing system within an organization.ERP
system gives Toyota Kenya more effective communication tool between internal departments
and external suppliers. Toyota Kenya uses (JIT) inventory management allow external suppliers
to integrate with their ERP systems, this integration allows suppliers to make proactive
inventory decisions based on real-time data (Cusumano,1988)

Toyota Kenya wants to get ahead of the competition and increasingly looks to innovative ways
of achieving effective solutions that cut costs but retain a smooth-running, efficient organization.
Toyota chooses the modules most relevant to their needs, and adds more as they develop and
expand further (Fujimoto, 1999).

Every business wants to get ahead of the competition and increasingly looks to innovative ways
of achieving effective solutions that cut costs but retain a smooth-running, efficient organization.
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Many businesses, especially in manufacturing, are turning to Enterprise Resource Planning
(ERP) to increase operational efficiency by integrating organizational systems into a single
program.

Management Integration

Harber and Samson, (2013) ERP has enables Toyota Kenya to join up multiple areas of the
business into one program and allows managers to have access to an overall database that covers
client information, orders, invoices and figures. The users, who will require high quality training
on the system, can update changes and then implement them in real time. Information is
accurately stored and will not get lost across other applications or spreadsheets.

Cost Benefits
Toyota Kenya constantly examining ways to cut costs but maintain efficiency, ERP has brought
significant cost benefits to the sector. Using ERP means that managers can make considerable
reductions in costs relating to inventory and administrative mistakes. With information available
to be exchanged across all levels, communication between all departments is made much easier.
As each department is able to access a central database, the cost associated with multiple data
centers are diminished, with both time and money saved, operating costs can also be reduced
using an ERP solution. The program works to merge all aspects of the business into one central
system, allowing businesses to improve their processes and cut down on waste or unprofitable
areas. By increasing organizational efficiency, ERP not only helps decrease operating costs but
can also reduce control and inventory costs as well as costs incurred in help desk support and
marketing.

Strategic Planning
ERP have help Toyota managers as a strategic planning resource, allowing them to pinpoint their
target market and define exactly what their aims and objectives are. In terms of day-to-day
activities, the software gives quick and easy access for managers to the information required for
better decision-making.

Organizational Performance
Doeringer, Lorenz and Terkla, (2013) the creation of a single system allows management to drill
down to see how efficient and productive individual employees are, using precise, accurate data
from each department. As a result, organizational performance together with staff efficiency can
be increased.

Financial Controls
With finance at the heart of every organization, managers need to keep a close watch on how the
financial department is operating. ERP give management comprehensive visibility into the
department’s performance, so the functioning of accounts can be viewed with full integration of

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business analytics. By keeping on top of the financial situation there are opportunities to boost
organizational profitability and to improve financial controls and risk management.

Implementation of ERP is not always simple; it can potentially create a lot of challenges
depending on the way it’s managed. Here are some of the potential ERP implementation
challenges in Toyota Kenya and how they have tried to overcome them.

Finding the perfect software

There are a vast number of ERP systems available, so it is can be confusing choosing which one
to invest in or what is best for the business.

The first step is to have a thorough understanding of the needs and challenges of the business and
then give this to a selection of ERP providers for a response. The ERP provider chosen should
have experience within your industry, take the time to understand the business and be able to
help you meet your business goals. Otherwise, you could end up making a very costly mistake. It
is important to ensure you gather enough information about your overall requirements and have
open conversations with potential providers, so you can find the right software to meet your
business needs and the right partner to support you in your ERP journey Bartezzaghi, (1999).

Commitment from managers

It is imperative that those who lead from the top are fully committed to the ERP implementation.
Actively communicate with key personnel and ensure they understand the need for them to be
fully involved. Also involving them in the decision-making process will increase the likelihood
of commitment. The better the communication, the more likely you will have complete buy-in
from not only your managers but also the rest of the team.

System training
The ERP system will only ever be as good as those who are using it, so one of the main
challenges your business will face is to ensure adequate training is provided. The successful
implementation of your ERP system will be much more feasible if you offer your employees full
training and ensure they are motivated to use the system.

Sufficient testing functional

Even if the ERP system meets all of the business requirements and expectations one of the
potential downfalls could be the lack of testing. It is imperative that a sufficient amount of testing
is carried out in the ERP implementation to ensure it will perform when deployed. Testing will
provide the opportunity to highlight any issues, so they are taken care of before the system is
fully implemented and live.

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Lack of budgeting
In the long run, ERP systems can help businesses increase efficiency and productivity, but
implemented badly could have the opposite effect, which is something that is not always taken
into account. When budgeting you must take into account the financial costs and ERP project
team members time. It is essential for someone within the company to take charge of the project,
communicate and work closely with the ERP provider in order to achieve the best results (Jo,
2011).

Manufacturing businesses always aim to operate as efficiently as possible, no matter whether

they are heavy equipment manufacturers or engineer-to-order (ETO) companies, just like Toyota,
to produce advanced machinery, specialized transportation systems, manufacturing robotics and
controls, or state-of-the-art facilities systems. Here are possible outcomes of efficient system:

Modern, connected ERP in the cloud

Your production management software should be an ERP system that supports your
manufacturing processes and all your other business activities in one environment. Using
traditional, specialized, stand-alone systems becomes too time- and resource-consuming to make
sure everybody has the information they need, and processes bog down (Forza, 2012).

Today’s powerful, cloud-based ERP can provide much of what you need. If you integrate a
manufacturing software suite, you can bridge almost all remaining capabilities gaps through
efficient configuration instead of coding. Your data migrations and integrations are also much
more efficient in the cloud.

Closing the loop between production and engineering

Even innovative companies struggle with connecting manufacturing, powered by ERP, and
engineering and product design, where teams commonly use a product lifecycle management
(PLM) system. We still see workflows where employees have to manually duplicate and process
information.

In this case, inefficiency can get expensive. Customer-requested changes are harder to implement
and take longer to move into production, which may already be underway. Procurement of the
right materials and parts may also take longer than necessary, and costs may balloon when
deadlines must be met.

Mobile enablement wherever possible

Companies are becoming more creative when it comes to using mobility, but most of them have
barely begun to explore it. In the cloud, you can provide easy, secure mobile access to ERP
functionality and information. Enterprise mobility tools like To-Increase’s Dynamics Anywhere
Mobility Studio make it easy to bring mobility to any business process. It’s too inefficient to
require employees to find a computer elsewhere in the facility, travel to a company location, or

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ask somebody to retrieve data for them. What’s more, mobility is more than efficient – it can be
truly transformative.

Configure, price, quote (CPQ) functionality

Your production management software needs to support the configure, price, quote (CPQ)
process that takes care of translating customer requirements into viable product configurations
and puts a price tag on them.

A powerful CPQ module can help you make design and production more efficient as you
standardize and reuse components and apply business rules to new product configurations. It can
also improve the customer experience by allowing your sales associates to produce a viable,
competitive quote within hours instead of weeks.

Asset management and maintenance

Equipment downtime, poor performance, or substandard output is inefficient, both in your own
production workflows and when it happens in customer operations. Your production
management software should include asset management capabilities that give you the means to
gather and process data from manufacturing equipment or machine products at customer sites
and pinpoint any deviations from the up-time, quality, or performance levels you promise or
maintain (Benders, J and Morita, M. 2014).

Armed with machine data insight, you can proactively repair or improve the operation of
customers’ machine products or your own production equipment. If you perform proactive
maintenance for customers, your revenue and customer retention can also grow. Usage data from
customers’ machines can flow back to your engineers’ PLM system, so they can improve designs
to make your products more competitive and valuable.

CONCLUSION

Procure-to-pay systems are designed to provide organizations with control and visibility over the
entire life-cycle of a transaction, providing full insight into cash-flow and financial
commitments. Most of the manufacturing companies such as Toyota Kenya using these systems
look for centralization of their procurement department, or to set up a shared services
organization for the same purpose.

According to the Aberdeen Group, despite the availability of technology such as ERP systems
which have dramatically reduce the mountains of paperwork and inefficiencies plaguing
accounts payable, few companies have addressed AP transformation like other processes
essential to the business.

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 REFERENCES
Bartezzaghi, E. 1999. The evolution of production models: is a mew paradigm emerging?. Int. J.
Prod. & Oper. Manage., 19(2): 229–250.

Benders, J and Morita, M. 2014. Changes in Toyota Motors’ operations management. Int. J. Prod.
Res., 42(3): 433–444.

Cho, S, Lee, B, Hong, J, Lim, S and Kim, Y. 2014. Subcontracting Structure and Hierarchy of
Employment Relations in the Auto Industry [in Kenya].

Cusumano, M. 1988. Manufacturing innovation: lessons from the Kenyan auto industry. Sloan
Manage. Rev., 30(1): 29–39.

Doeringer, P, Lorenz, E and Terkla, D. 2013. The adoption and diffusion of high-performance
management: lessons from Japanese multinationals in the West. Cambridge J. Econ., 27:
265–286. [Crossref], [Web of Science ®].

Forza, C. 2012. Work organization in lean production and traditional plants: what are the
differences?. Int. J. Oper. & Prod. Manage., 16(2): 42–62.

Fujimoto, T. 1999. The Evolution of a Manufacturing System at Toyota, Oxford: Oxford

University Press.

Harber and Samson, 2013. Just-In-Time: the issue of implementation. Int. J. Oper. & Prod.
Manage., 10(1): 21–30.

Jo, H. 2011. A comparative study of green-field factory in Japan and Korea; focused on the
relations between production system and human resource management [in Korean].
Korea Socio. J., 35(2): 147–177

Jo, H. 1998. Flexible production system and changes in work organization [in KENYA]. Econ. &
Soc., 38: 244–264.